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Which Malaysian telco is going to rule Q1?

By Goh Thean Eu May 19, 2016

Sources: Celcom not likely to topple Digi, but may tip Maxis

Celcom’s postpaid business seeing good traction, not so its prepaid business

ALL eyes will be on Axiata Group Bhd’s first quarter financial results announcement on May 25, which will answer the question of which Malaysian telco led the industry in the first quarter (Q1) of 2016.

Until Axiata’s official numbers are out, the leadership position in terms of overall subscriber base will still be held by Digi.Com Bhd, followed closely by Maxis Bhd.

Telenor ASA-backed Digi closed the end-March quarter with 12.34 million subscribers, while Maxis, with 12.31 million subscribers, was just about 30,000 behind.

With the top three incumbents so close to each other, it appears that the Malaysian mobile industry has truly become a three-horse race.

But where did all those unhappy mobile users go?

During the first quarter, Maxis reported a net reduction of 384,000 customers, comprising 288,000 prepaid and 96,000 postpaid customers.

At the same time, Digi recorded a net addition of 211,000 subscribers, comprising 149,000 prepaid and 62,000 postpaid users.

Hypothetically, assuming Maxis’ 384,000 lost subscribers migrated to a different service provider and that 211,000 of them are now with Digi, it would mean that 173,000 of the remaining lost subscribers would have gone elsewhere, such as Celcom or U Mobile Sdn Bhd.

Of course, it would be unfair and inaccurate to conclude that 211,000 of the 384,000 subscribers who left Maxis ended up signing plans with Digi. After all, there are other various reasons that could have contributed to the decline in Maxis subscribers.

Can Celcom regain the lead?

With just 90,000 subscribers away from the top spot, and the fact that Maxis suffered a 384,000 net reduction in subscribers, one can’t help but wonder if Celcom was able to take full advantage of Maxis’ recent social media fiasco.

From the initial hints provided by Celcom chief executive officer Shazalli Ramly (pic above), it appears that the company may have secured the much needed momentum to clinch top spot.

In February 2016, it launched its new Celcom First Gold plan, giving customers unlimited phone calls and text messages and up to 10GB of data quota, for just RM80 a month. [RM1 = US$0.25]

The plan took the market by surprise as it was the first to react to U Mobile’s Hero Plan (7GB data quota and unlimited calls for RM70 a month).

Shazalli said that prior to the launch of the Celcom First series of plans, the company had already been registering 45 postpaid subscriber activations daily. With the launch, its daily activation rate shot up to over 3,000.

Assuming it secured 3,000 daily activations for its postpaid business during a 45-day campaign (it could be more), the company would be looking at a total activation of over 130,000 new subscribers.

It is also key to note that these numbers could have been achieved via two scenarios – migration from rival service providers; or existing Celcom subscribers migrating to the new plans. The latter scenario would lead to a boost in daily activations, but won’t result in a jump in its overall subscriber base.

Not No 1 yet

According to an industry source, Celcom is not likely to recapture the pole position in the first quarter.

“The company’s Celcom First Gold plan was very well received by the market and it is getting good traction – however, there’s still room for improvement when it comes to its prepaid traction,” said the industry source.

“It seems that Digi will hold the top position in terms of overall subscriber base for the first quarter.”

A look at Celcom’s recent trend in subscriber base shows that its postpaid segment has been relatively stable. It ended the fourth quarter with 2.803 million postpaid subscribers, versus 2.804 million in the same period a year ago.

However, its prepaid business has been on a downtrend. For the full year 2015, it had 9.45 million prepaid customers versus 10.17 million in the fourth quarter 2014, and 9.71 million in the third quarter of 2015.

“It would take time for Celcom to regain momentum in the prepaid segment, but it has good leadership and has what it takes to recapture the pole position,” said the source.

While the source said that Celcom’s overall subscriber base for the quarter ended March 31, 2016 would probably not surpass Digi, it could however surpass Maxis’ base.

Like we said: All eyes will be on Axiata Group’s numbers coming out next week.